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Intel's (Moore's) Law and Microsoft's Lawlessness Ending -- Economic Crisis

by R. Prechter Friday, May. 19, 2006 at 9:44 AM

Dell, Microsoft, and Intel stocks are in freefall. Like the last Tech Wreck (in 2000), this one has to do with Moore's Law.

Intel's (Moore's) La...
moore__sl_small.jpgp4b7wk.jpg, image/jpeg, 585x433

Transistors-per-chip growth (Moore's First Law) is ending (soon, see graph), and it could be very bad for the economy. The good news is that Gordon Moore's Second Law is finally coming into effect. This "forgotten" part of his famous article was about "handy" "sale"-priced computers (see his cartoon).

The end of periodic transistor-per-chip doubling (First Law, see graph) could be as bad for Silicon Valley and companies like Intel, Microsoft, and Dell as Peak Oil is for Detroit, GM, and Ford. As for Gordon Moore's Second Law, which presaged the $150 computer you see here, I'll bet even he, the founder of Intel, doesn't want you to know about it. I know Bill Gates has criticized the idea. "They" want the super-cheap computer to be a secret, or just for the Chinese, but it is "exposed" (shown) below.

A whistleblower in the computer industry has written an article on all this. It is long, but the "sound" bites below give you the gist of it.

Sound Bites from Article
"End of Moore's Law -- $100 Computer coming, to U.S. too."
by Clayton Hallmark

"The end of Moore's Law looms as little $100-200 commodity PC appear in Asia. Soon they will be everywhere."

"Watch the news on Intel and Dell. Especially watch for postponements (all kinds) and spending cuts. Then you'll know the end of Moore's law is near."

"With commoditization, computing has outgrown Microsoft's 'patent pool' just as radio once did Hazeltine's."

"Intel has bought and paid for its founder's (Moore's) law, making it a self-fulfilling, self-serving prophecy. They can't afford it much longer."

"A Chinese can buy a $150 computer -- but you can't. (Refers to the Longmeng.)"

"The high-end niche of IBM is the safest part of US computing -- safest from Asian commodity products."

"Many in American computer manufacturing need to switch to providing services. You can't fight commoditization."

"Future US leadership in computing will be based on things like writing algorithms to create businesses (like Google) and solving big problems in the many fields where he US has grad school leadership."

"In the 'Yankee tinkerer' tradition, the US will invent new products, manufacture them until commoditization, and then control the marketing. The US can lead in computing for a long time."

"Shrinking transistors start behaving like the old thermionic tubes. Thermionic emission: physically, that's what will stop Moore's Law."

"Smaller-cheaper, or miniaturization-commoditization, has always been the Electronics Way, especially the commoditization part. People forget that."

"Commoditization -- cheap computers, almost as disposable, nondescript, and plentiful as transistor radios -- will take over first at the bottom of the computer food chain, at the home PC."

"Bill Gates will NEVER spend Microsoft's $60-billion cash hoard. He would downsize the company first."

"Commoditization of computers will spread from the home up through servers and corporate IT. For the foreseeable future, commoditization will replace technological progress of all kinds as the newsmaker in computing. Smaller-cheaper will be the visible aspect of commoditization."

"Look at the End-of-Moore's-Law chart. The M.L. slowdown before the year 2000 coincided with the Tech Wreck in the stock market. Think about what the end of M.L. will mean."

"PC history is about Intel's (Moore's) Law and Microsoft's lawlessness."

"$100-$200 computers are not just for developing countries, as Nicholas Negroponte of the MIT Media Lab thinks. 'How you gonna keep 'em down on the farm' in China once the American consumer sees them?" (Nick is the brother of US spy chief John.)

"Moore's Law's J-curve (showing doubling of transistors on a chip every year or two) will start looking like an S-curve next year (2007), starting to level out on top."

"It's so obvious. Moore predicted this also: Computers will go the way of transistor radios -- book size or less, disposable, anywhere use (ubiquitous). Their processor performance will be secondary. They will be made in Asia, not by Dell, with lots of hand labor. Commoditization."

"There are crazy people running around to conferences telling people we will have PCs with the computing power of the human brain. (Oh, no. The "electronic brain" is back. Does it meet the Turing human-impersonator test yet?) Personally, I have a hard time matching wits with the electronics on a new car, even though I once wrote a book about it."

"Cheap computers mean cheap, or free, software."

"Capital-spending cuts by Intel suggest Moore's Law is ending."

"Intel could chase the shrinking transistor to the vanishing point, of profits. But they won't."

"An under-$150 computer with DVD -- without Microsoft or Intel -- is available in 2006 in China (the Longmeng). Woe are Intel, Microsoft, and Dell."

"The transistor can't shrink many more years. What follows (spintronics, photonics, quantum devices) will not be electronic, not faster, not cheaper, and definitely not Moore's Law."

"Miniaturization has driven progress in electronics since radios were scaled down (and called 'midgets') for strapped consumers in the Great Depression of the 1930s."

"In electronics, the emphasis on smaller-cheaper will reappear for computers."

"With notebooks now where the action is, there's less reason for continuing with Moore's Law and pushing more performance."

"Some don't want to admit this (no need for much more speed), and no one wants to admit to being an 'average' computer user."

"What I need is a small-cheap computer to carry on my infinite-gas-mileage bicycle. Then I can just throw it away if I break it."

"In the future, computer performance will be sacrificed for portability and power savings."

"I would like to see a portable doesn't need recharging, that uses flashlight batteries or solar cells."

"In a world of shrinking resources and growing demand, products get made smaller and cheaper."

"Increased air-freight costs (jet fuel, you know) will hurt JIT (just in time) makers and sellers of "special," "latest thing" computers and thus will stimulate commoditization (generic, slowly improving PCs)."

"Commodity computers have time to 'take a slow boat from China' and avoid air-freight costs."

"Computer makers should preload free software for 99 percent of uses."

"A $100 computer will be a long time coming as long as a $70 operating system is involved."

"Microsoft is a publishing company that patents what should be copyrighted."

"In Korea, Taiwan, Vietnam, etc., ignoring monopoly patents is not piracy. They must protect their 'infant industries' as we once did."

"Is piracy even possible against a monopoly?"

"Hardware trumps software -- economically, legally. Remember the VCR wars between Hollywood (publishers) and VCR makers (hardware)? Hardware won."

"It is hard to tell people how to use things (VCRs, computers) in the privacy of their own homes. 'Anticircumvention' laws are bound to fail."

"Software prices have declined hardly at all since computers became transistorized. Smaller-cheaper (commoditization) will change that."

"Diehr (the court ruling allowing software patents) makes computers 'dear.' India's Parliament prevents such rulings there."

"Microsoft's monopoly is enforced by 7000 minor patents. Can you name one? A company called Hazeltine once did the same thing with radios. Who remembers THEM now?"

"Microsoft is a 'patent troll.' "

"Harness the promise of technology without becoming slaves to technology." (President George W. Bush) "End slavery to Microsoft and Intel." (Me)



"Moore's Law is just an example of the S-curve of natural growth that comes from biology (rabbit population growth)."

"Moore's Law of transistor doubling follows an S-curve, not a J-curve ever-upward as most think. There are only so many rabbits (new materials, new fab processes) Intel can pull out of its hat to overcome obstacles to Moore's Law."

"The hardest thing to forecast about technology is how people will use it. However, Moore's paper (see cartoon) did also predict palm-sized, handy, super-cheap computers as a result of integrated circuits. Most people don't remember that part."

"It's products (computers, etc.) that need to be miniaturized further, not transistors."

"We need cheaper, not better."

"Future computer progress will come not from the likes of Intel but from computer makers, in Asia."

"Hedonic pricing (performance-adjusted pricing) is a 'cheapening trick.' "

"Moore's Law is not just about max transistors on a chip -- but MINIMUM COST PER TRANSISTOR FOR THE OEM (at the motherboard level). It's economics as well as science."

"Shrinking transistors start behaving like the old thermionic tubes. Thermionic emission: physically, that's what will stop Moore's Law."

"Future logic devices won't be faster or cheaper than CMOS (transistors) and might not even be general-purpose."

"The baton for PC progress is passing from the component makers like Intel to equipment makers (OEMs) -- in Asia."

"The first microcessor was made by Americans, for Japanese, to make smaller-cheaper calculators. Then Japanese manufacturers took over calculators."

"All we are waiting for is a manufacturer in Asia to make a $100 computer. (We're close.)"

"Computers have gotten cheaper as their guts have followed Moore's Law and their manufacture has followed other gadgets to Asia."

"First the parts business goes (to Asia), then the completed product (radio, television, computer)."

"Microsoft merely replaced Kildall's DOS with Windows copied from Xerox and Apple."

"'To promote the progress of science and useful arts....' (U.S. Constitution, on intellectual property.) Have Microsoft patents done that?"

"Could gunboat diplomacy assert Microsoft's rights against Asian 'pirates'?"

"Who are the real pirates in computing?"


Electronics industry trends emulate natural laws like the conservation of energy and matter, also natural growth. Computers, like radios before them, get smaller and cheaper, using less material in their manufacture and less energy in operation. The density of transistors follows an S-curve of natural growth, and the Moore's Law phase of that is ending.

As computers become commodities, and as brands and higher performance become less important, computer manufacturing moves to ever-cheaper labor markets in Asia.

The miniaturization of transistors (per Moore's Law) for improved performance becomes less important than miniaturization of the computers themselves for lower cost. Hedonic pricing (lower price for a given level of performance) is replaced by lower absolute prices.

In sum, the end of Moore's law looms as little commodity PCs ($100-$200) start to arrive from Asia. Soon they will appear everywhere.
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Moore's Law article was about commoditization.

by R. Prechter Friday, May. 19, 2006 at 9:44 AM

Moore's Law article ...
moore__s_second_law_cartoon.jpghbv4nr.jpg, image/jpeg, 538x200

The transistor-doubling deal was a very minor part of the article. Commoditization of computers will kill Dell and Intel, possibly Microsoft.
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